The Fed – Just One Giant Money Counterfeiter

Posted by truthpills on 2010/02/02

Tyler Durden

Zero Hedge

February 1, 2010

Must read perspective on the Federal Reserve, by Robert Murphy, published originally at Ludwig von Mises Institute

San Jose State economics professor Jeffrey Rogers Hummel tells all his students that the easiest way to understand the Federal Reserve is to think of it as a giant, legalized counterfeiter. I had always known that the Fed and other central banks were like counterfeiters, but I still thought that the actual mechanics of open-market operations and so forth actually provided some important distinctions.

In large part because of my frequent email exchanges with Hummel, I now realize that I was being naïve. Once you understand the details of modern central banking, you are able to step back and see that it truly is a way for the government to use the printing press to pay its bills. All of the complicated process of targeting interest rates through buying Treasuries simply hides this essential point — and perhaps deliberately so.
An Old-Fashioned Monarch With a Printing PressRead the full article